Cash flow software with assets and liabilities

Cash flow forecasts with assets and liabilities

Looking at most of the answers to Google searches for cash flow software with assets and liabilities, these seem to deal with cash flow statements and the essentials of preparing cash flow forecasts. But I don’t think that’s what your are searching for. What I think you are looking for is cash flow software that also deals with assets and liabilities. Let’s take a look…

Cash flow software with assets and liabilities: Cash flow software with assets and liabilities functionality will have a projected balance sheet report alongside the cash flow forecast report. The balance sheet will include closing assets and liabilities at the end of each month or period, whereas the cash flow report includes incoming cash and outgoing expenditure.

If I’m right in my opening statement to this article, then you are looking for cash flow software that also deals with assets and liabilities. Rather than how to deal with assets and liabilities on your own spreadsheet cash flow forecast or on a cash flow statement.

But of course the assets and liabilities won’t be on the cash flow report itself. But instead they are the resulting closing balances at the end of each month or complete forecast period.

The closing assets and liabilities will be on the projected balance sheet reports within the software. Which means that as the cash flow report deals with your business’s cash movements only, your assets and liabilities won’t appear on that report.

However, just covering off on the cash flow statement question. There is a cash flow statement report in our Cash Forecaster software. As expected, the cash flow statement does include the movements in your assets and liabilities.

This includes for example; trade payables, inventories or stock, trade receivables, other debtors, etc.

What assets and liabilities are included in this cash flow software?

Depending on what assets and liabilities your business has, these should mostly be covered in our cash flow software. The assets and liabilities include the following:

Assets on the projected balance sheet will include:

• Fixed assets, which includes additions, disposals and their accompanying depreciation.
• Cash at bank.
• Stock or inventory and work in progress.
• Trade debtors or amounts owed by customers.
• VAT (GST or Sales Tax) debtor.
• Directors loans.
• Taxation debtor.
• Other debtors.
• Accrued revenue.
• Prepayments.

Liabilities on the projected balance sheet will include:

• Trade creditors or amounts owed to suppliers.
• Bank overdraft.
• Invoice discounting or factoring balance.
• Taxation creditor.
• Loans and hire purchase – either due within one year or after more than one year.
• PAYE creditor.
• VAT (Sales Tax or GST) creditor.
• Directors loans.
• Other creditors.
• Advanced sales.
• Accruals.
• Prepaid income.

Opening balance assets and liabilities

Of course no cash flow forecast would be complete without the opening balances of your assets and liabilities. Unless of course your business is a startup business forecasting for the first time.

With our Cash Forecaster software there is the ability to enter the opening balance for each of the above assets and liabilities.

How assets and liabilities affect your cash flow

Your business’s cash flow will be affected by your asset and liabilities due to how these change over time. Changes to your assets and liabilities can affect your cash flow in both positive ways and negative ways.

Let’s take a look at some of the above assets and liabilities and how these affect your cash flows.

What asset and liability accounts affect cash flow:

• Accounts receivable or amounts owed from customers: An increase in debtor days (which means amounts owed by customers increases) will hurt your cash flow. Whereas a decrease in debtors days where you get paid faster by your customers will improve cash flow.
• Changes in inventory or stock levels: An increase in your stock or inventory will reduce your available cash. Whereas a decrease in stock or inventory levels will improve your cash balances.
• Changes to loans or hire purchase: Increases in loans or hire purchase will initially increase cash balances and therefore your cash asset, but it will increase liabilities at the same time. However, once loan repayments begin, this will reduce cash flow.
• The introduction of factoring: Whilst the introduction of invoice factoring will reduce profitability due to the costs associated with this type of financing, it will improve cash flows.

How do liabilities affect cash flow?

Liabilities affect cash flow by reducing available cash as the liability is decreased. Whereas cash flows are increased as liabilities are increased, for example a loan advance will increase the cash balance available to the business.

What happens when liabilities increase?

When liabilities in a business increase this improves cash flow as there’s less money being spent or more money being borrowed.

However, this isn’t necessarily a good sign if the reason why liabilities are increasing is due to bad cash flow, which is why cash flow forecasts are important to review future cash flows.

How do assets affect cash flow?

Assets affect cash flow by increasing available cash as the asset is decreased. Whereas cash flows are reduced as assets are increased, for example as accounts receivable increase the amount of available cash to the business will reduce.

How does cash flow affect the balance sheet?

Positive cash flows affect the balance sheet by reducing assets or increasing liabilities, whereas negative cash flows increase assets and reduce liabilities on the balance sheet. The same applies to projected balance sheet reports included in a cash flow forecast.

I hope you enjoyed this article about cash flow software with assets and liabilities

I hope this article has helped in someway to solving your question about cash flow software with assets and liabilities. If you have any further questions, please pop them in the comments below.

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